World View & Market Commentary. Forest first; Trees second. Focused on Real & Knowable facts that filter through the "experts" fluff and media hyperbole. Where we've been, what the future may hold and developing a better way forward.

Friday, December 16, 2011

I'm out of town today so again appreciate keeping one another up to date on today's news in the Open Thread below.

Stumbled upon the following video which I think is excellent. It is a call out, if you will, to the police and military, asking them to evaluate their jobs and to consider the bigger picture. I think the same can be said for those who are supporting the big financial firms, and also those supporting politicians who are on the take and then supporting the financial criminals. I think everyone on the planet needs to evaluate what their life's energy is supporting.

There is no exaggeration in saying that it is a classic good versus evil battle, make sure you are on the right side with your actions that way we don't wind up complacent like the Germans of the early twentieth century.

Thursday, December 15, 2011

Equity markets are considerably higher this morning, the media is hyping a fraudulent Jobless Claims number but the futures have been ramping all night long, they did not just ramp on supposedly “good” economic data. The dollar is slightly weaker, bonds are slightly lower, oil is slightly higher, gold & silver are close to even, and food commodities are slightly higher and still squatting on that neckline.

The Jobless Claims are THE major headline on CNN, “Unemployment Claims at Lowest Level Since ’08.” Supposedly the number came in at 366,000, which is almost to the break even point of 350,000. To which I can only point to the unadjusted data for the week, and I’ll leave it to you to guess how much “seasonal adjustment” is required to make that number happen:

“The total number of people claiming benefits in all programs for the week ending November 26 was 7,449,507, an increase of 874,670 from the previous week.”

They claim, however, that the advance number of Initial Claims fell by 95,506 for the past week, but the week prior they rose by 151,000, which means that over the past two weeks the unadjusted Initial Claims rose by more than 55,000 and yet the reported number has fallen by more than 30,000! Here’s Econostupid:

HighlightsBack to back declines of 19,000 in initial jobless claims are signaling sudden strength in the labor market. Claims in the December 10 week came in at 366,000, far below expectations for 390,000 and compared to 385,000 in the prior week (revised 4,000 higher). The 366,000 level is the lowest since May 2008. The four-week average is down 6,500 to 387,750 for the lowest level since July 2008. The average, in a convincing sign of strength, has been down in 10 of the last 12 weeks.

Continuing claims, in data for the December 3 week, rose 4,000 to 3.603 million, but the four-week average is down 5,000 to 3.666 million which is another recovery best. The unemployment rate for insured workers is unchanged at 2.9 percent.

Though shortened weeks and special factors during the holidays often cloud this report, the Labor Department cites no difficulties with the data. The data point to a strong upward pivot underway in the jobs market and will build expectations for a strongly improved December employment report.

Yep, it sure is hard to get right during the holiday season… and maybe it’s also hard to get right during the election season too… just sayin’.

Data, when not tampered, tends to be consistent and without conflicting with other data. Yet this morning we get more conflicting data – a negative report on Industrial Production and a positive report from the New York “Fed” on Manufacturing. This data used to be mostly consistent, but in the past year or so has become obviously far less consistent and that tells me that it’s not to be trusted – again no data from self-interested narcissists should be trusted… EVER.

To wit the Empire State Manufacturing Index supposedly rose from the flat level of .61 all the way to 9.53. Here’s Econoplicit:

HighlightsThe pace of activity in the New York region's manufacturing sector is picking up briskly this month, to 9.53 for the Empire State index vs little change in November, at 0.61, and a prior run of monthly contraction that goes back to June. New orders are up to 5.10 this month vs minus 2.07 in November with shipments especially strong at 20.87. Manufacturers in the region added to their workforces in the month with the employment index at 2.33 vs minus 3.66 in the prior month. The six-month outlook for general business conditions has really picked up, to 52.33 vs 39.02 in November and 6.74 in October.

Negatives in the report include a contraction in unfilled orders and a rise for input prices. Otherwise this report is a positive and offers an early indication of strength for the nation's manufacturing sector this month.

And then you can contrast that supposed strength against overall Industrial Production which fell from the prior .7% rise to -.2%:

HighlightsIndustrial production weakened in November-largely on a decline in auto assemblies although manufacturing was down in general. Industrial production declined 0.2 percent after surging 0.7 percent in October. November's figure was significantly below consensus expectations for a 0.2 percent increase. By major components, manufacturing dropped 0.4 percent after gaining 0.5 percent the prior month. For November, utilities output advanced 0.2 percent while mining edged up 0.1 percent.

Manufacturing was pulled down largely by a 3.4 percent drop in output for motor vehicles and parts, following a 3.4 percent jump in October. Excluding autos, manufacturing still slipped 0.2 percent, following a 0.3 percent rise the prior month.

On a seasonally adjusted year-on-year basis, overall industrial production was up 3.7 percent in November, compared to 4.3 percent the month before.

Overall capacity utilization eased to 77.8 percent from the recovery's high of 78.0 percent in October. Analysts had called for 77.8 percent for November.

Although November's manufacturing number is disappointing, it may be temporary as this morning's release for Empire State manufacturing showed an unexpectedly strong number for December. More data on manufacturing will be posted at 10:00 a.m. ET for Philly Fed manufacturing for December.

Truthfully, who cares? We manufacture so little that it’s nothing but a national embarrassment, especially if you were to strip out the manufacturing and exporting of weaponry which makes it shameful.

Besides weapons and cheeseburgers, here's what we're really good at producing:

The PPI rose in November to a supposed +.3% from the prior -.3% (LOL, just look at the chart above). Oil did rise during the month, but food commodities fell, so again I don’t really trust the justifications served up by ‘plicit or the Bureau of Lies and Seasonal adjustments (BLS):

HighlightsProducer price inflation picked up in November but it was due to food, not energy. Producer prices rebounded 0.3 percent after falling 0.3 percent in October. Analysts had expected a 0.2 percent rise in November.

Turning to major components, energy rose 0.1 percent, following a 1.4 percent drop in October. Leading this increase was a 9.4-percent advance in home heating oil prices. Gasoline actually dipped 0.1 percent, following a 2.4 percent decrease in October. Food cost inflation spiked to a 1.0 percent gain after decelerating to a 0.1 percent rise in October. Over half of the November advance can be attributed to the index for fresh and dry vegetables, which rose 11.5 percent.

At the core level, the PPI gained a modest 0.1 percent, following no change in October. For the core, upside pressure came from passenger cars (0.6 percent) and pharmaceuticals (up 0.9 percent) with a decline in prices for light trucks (down 0.2 percent) softening the overall core.

For the overall PPI, the year-ago rate in November was 5.9 percent versus October's 6.1 percent (seasonally adjusted). The core rate in November firmed to 2.9 percent from 2.8 percent in October. On a not seasonally adjusted basis for November, the year-ago headline PPI was up 5.7 percent versus 5.9 percent in October. The core was up 2.9 percent on an NSA year-ago basis, compared to 2.8 percent in October.

Of course PPI leads CPI, but both are dramatically underreported.

The TIC data for October took a huge tumble deep into negative territory. That kind of throws a little cold water on the capital flight coming over to the U.S., that is if you believe any of the numbers which I clearly do not. The truth, I think, is that TRILLIONS are flowing from the coffers of the United States to banks and countries overseas and all of that activity is not to be seen in any “TIC” report (nowhere actually). So, we feed them, then the 1% in Europe wealthy and savvy enough to flee with their wealth do. America is no “safe” harbor however, that is all as phony as the data emanating from under the control of American narcissists.

Still, look at the Net Flows and you’ll see that flows went from +$65 Billion all the way down to -$48.8 Billion:TIC December 2011

HighlightsConsumer confidence in the U.S. rose last week to the highest level in two months, a sign that job gains may be lifting sentiment during the holiday shopping season. The Bloomberg Consumer Comfort Index improved to minus 49.9 in the period ended December 11 from minus 50.3 the prior week.

Two of the three components of the weekly comfort index improved. The measure of Americans' views of the current state of the economy rose to minus 87.9 last week from minus 89.7 in the prior period, and the buying climate index increased to minus 51.8 from minus 52.6. The gauge of personal finances declined to minus 10 from minus 8.5.

Indeed, there are signs of one track improving in a two-track consumer sector defined by having a full-time job or not. Confidence among consumers with a full-time job rose to minus 32, the highest level since July, from minus 37.6 the prior week. Sentiment declined for Americans who are unemployed and for those with part-time jobs.

Dang, if I didn’t know better, I would almost think we weren’t really in the middle of another Great Depression! To all of which I call bullshit, and am frankly getting very tired of the lies, spin, and outright fraud. Glad to see the “Protestor” make it onto Time’s Person of the Year… hopefully next year it with be the “Revolutionary.”

Wednesday, December 14, 2011

Equity futures are falling again, with the dollar stronger and breaking out, Euro falling and breaking down, oil is lower and may have put in a top, gold & silver are in correction mode, and food commodities are hanging tough at that large neckline.

The hypocritical self-interested hacks who refer to themselves as the Mortgage Banker’s Association are still spewing completely not believable statistics and should, in my opinion, be shut down. The claim this week is that last week Purchase Applications fell a whopping 8.2% (in just one week – I have some swamp land for you and this is tame for their standards), while at the same time they claim that refinancing activity rose (the opposite direction) by 9.3%!! Ha, ha, that’s a 17.5% gap between the two, all in the course of just one week. Do you believe that? If so, I have a great “investment” for your retirement, contact me. Here’s Econocomplicit:

HighlightsThe volume of purchase applications swung lower in the December 9 week, down 8.2 percent vs an 8.3 percent rise in the prior week. Swings in weekly data can be severe but the overall trend for purchase applications has been positive. The volume of applications for refinancing has also been positive, up 9.3 percent on top of the prior week's 15.3 percent gain. Low mortgage rates are behind the demand with the 30-year averaging 4.12 percent, down six basis points for the lowest rate of the year.

Complete fraud, again, my opinion is that the people disseminating this data should be prosecuted – their data, I believe, is completely biased and misleading and has been so during the creation of the largest housing bubble in history that has damaged millions of lives. Their deceptive practices picked up a notch as the bubble imploded and they changed the way they report the data in order to make tracking reality more difficult. Fraud most certainly is a prosecutable offense and that should be applied to the MBA as well as the NAR, and the reporting of such statistics should be mandated to be placed in unbiased hands.

Meanwhile, the BLS says that Import prices rose in November by .7% and that Export prices rose by .1%. However, the year over year figures are showing price deceleration, here’s Econospin:

HighlightsBelying a jump at the headline level, inflationary pressures from import prices are easing. A 3.6 percent monthly surge in the price of imported petroleum products skewed total import prices 0.7 percent higher in November. But when excluding petroleum, import prices fell 0.2 percent following a 0.3 percent ex-petroleum decline in the prior month. Import prices for final goods show no more than marginal pressure, up 0.1 percent in the month for both capital goods and consumer goods. On the export side prices are also subdued, up only 0.1 percent in November following a decline in October.

The rise in the dollar, which is getting a major boost from safe-haven demand tied to Europe, is a major factor helping to subdue inflationary pressures from import costs. This together with no more than moderate economic demand are preventing pass through of high energy costs. Today's report should confirm expectations for moderate core readings for tomorrow's producer price report and Friday's report on the consumer side.

The mask is now completely off Europe. Despite their meetings, rumors, and supposed deals to leverage to infinity and beyond, spreads continue to blow wide and politicians are forced to concede that solutions won’t come “easily.” No kidding, that’s because the impossible math and debt saturation they created just is. In the background nations are making preparations for the day the Euro in its present form is no longer – I believe we are very close to that day, it is coming soon. There are dangers involved in the transition, of course, so we need to maintain our vigilance.

The dollar and the U.S. are no better off, we just are better at charades for the time being. The dollar in its present form is equally toast, the clock is ticking here too. Because that clock is based on the exponential math that underlies debt, time will appear to move more quickly into the future until we reach the “event horizon.” To me that is the day the dollar in its present form is done and we wind up with the next iteration… the key will be WHO is then in charge of controlling the production of the money. That is THE most important thing for a nation to get right.

While the Europeans are having difficulty forcing more square debt into the round debt saturated black hole, criminals the world over are disappointed that the world’s Central Criminals aren’t producing massive more quantities of money, as if this were somehow not enough:

M1:

Well, it’s not enough because all the money production is going into the wrong hands – that’s a function of WHO controls the production.

With money production completely out of control, commodities have been the place to be to shelter wealth – Waves of inflation, waves of deflation. Right now commodities are experience a wave of withdraws, but the primary trend lines are still very much in tact – let’s take a closer look.

Gold has broken its daily chart uptrend line and is definitely in correction mode. As you can see on the Daily chart below, the next area of support is in the $1,550 range:

When we zoom out and look at the gold Weekly chart we see that next trendline pretty clearly:

But that Weekly uptrend line is not THE primary trend line, no, that is found on the Monthly chart where it is clear that the mid $700 level is where the long term trend line resides, with an intermediate support line in the $1,100 region:

First of all, from my perspective nothing has changed fundamentally – the world is still saturated with debt, the math is completely beyond impossible. Thus those WHO are currently in power (in charge of the production of money) ARE with great certainty going to do anything and everything they can to hold onto that power. If that means bankrupting the nation and everyone in it – consider it done. The overall trend is clear – money will be produced until all confidence is gone.

Still, if you are playing in gold, watching the corrections can make it hard to hold on. I would say that if you are a speculator with a short time horizon, then you should have sold on a break of the daily trendline, buy again at the weekly trendline. However, if you are a middle term investor, you may want to hold until the weekly trendline and see what happens. If it breaks, then use that line as your demarcation line for your in or out decision point… riding from $1,550 all the way to $1,100 or $750 would not be fun if a serious wave of deflation comes. Of course moving in and out isn’t for everyone, so if you are in it to ride all the waves out, forget about it, nothing’s changed.

Looking at the silver chart, it is also in correction mode with up slopping support in the $24 to $25 range:

While that looks like a big correction in silver, put in perspective. Only a few short years ago the prospect of $20 silver seemed radical. Again, nothing’s changed, the fundamentals are the same, waves of inflation, waves of deflation, but in the end inflation kills the currency. In regards to precious metals and commodities, also remember that they are some of the most highly manipulated markets there are. There will be moves to intentionally make you abandon your position. One trick now commonly used is to break the trendline, then reverse. So, from my perspective nothing is safe in this environment, it is all lawless 100% of the time. The only way to ensure you end the lawlessness is to return the power of money production into the hands of the people where it properly belongs.

Gamblers beware, yesterday the market fell substantially, but so did the VIX.

There have been many large corporations lowering their earning estimates in the past week, this morning it was Best Buy’s turn. Hmmm, how does that square with all the hype over huge (supposedly record setting) gains in “Black Friday” sales, and now the made for T.V. supposed 15% one year gain in online sales to which my bullshit flag is flying at full mast!?

Yep, not so much. Retail Sales for November decelerated from the .5% supposed growth in October to only .2% which is less than half the .5% expected. Just as a reminder, the Retail Sales report is grossly overstated due to measurement in dollars and also due to substitution bias which fails to account for stores that have closed. So, all the hype was just that, a complete snow job on the populace – here’s Econoplicit:

HighlightsRetail sales in November advanced but not as strongly as expected. However, October and September were revised up and weakness in November was largely in components that had surged earlier. Overall retail sales in November grew 0.2 percent, following a 0.6 percent boost in October (originally up 0.5 percent) and a 1.3 percent spike in September (previously up 1.1 percent). November's number fell short of market expectations for a 0.5 percent increase. Excluding autos, retail sales gained 0.2 percent in November after increasing 0.6 percent in October (unrevised) and increasing 0.6 percent in September (previously up 0.5 percent). Analysts had called for a 0.4 percent improvement. Gasoline sales declined marginally in November. Sales excluding autos and gasoline in November rose 0.2 percent, following a healthy 0.7 percent increase in October. Within the core (excluding autos and gasoline), gains were mixed but mostly positive.

Retail sales on a year-ago basis in November came in at up 6.7 percent, compared to 7.5 percent in October. Excluding motor vehicles, sales were up 6.6 percent on a year-on-year basis, compared to 7.5 percent the month before.

The headline numbers for November retail sales were disappointing but upward revisions are partially offsetting. The trend still appears to be moderately healthy spending gains, taking into account earlier robust gains. However, today's later released Redbook sales suggest a deceleration in sales growth in early December. A caveat as always is that weekly numbers are relatively volatile.

So much for setting records, note how Econoday fails to compare the current number to the revised number like they do when it’s the other way around? If they reported this consistently then the headline would read, “Retail Sales growth only one-third that of October!” But the truth is, as I’ve pointed out repeatedly, these numbers are all, well let’s just say that my bologna has a first name…

If you really want to see your true Retail Sales growth and true all-time records, here it is right here:

Bucking the trend of large corporate misses, the NFIB Small Business Optimism Index actually did rise 1.8 points in November, up to 92.0 which is still well below their base 100 index number. Here’s Econohope followed by the entire NFIB report which is a always a pretty good read and indeed they are more optimistic sounding… (just as the rug gets pulled?)

HighlightsPessimism is easing significantly in the small business sector based on the November sentiment report from the National Federation of Independent Business whose index is up 1.8 points to 92.0. Five of 10 components rose while three held unchanged with gains led by a big jump in the key component of future sales. Employment plans also rose sharply while economic expectations improved sharply. Though the direction is positive, overall readings still remain weak and well below those prior to 2008.

After its numbers were challenged, the National Association of Realtors took another look at the data and has decided to lower its numbers for home sales from 2007 to 2010.

Last year saw the fewest number of homes sold in 13 years. Now we find the number is even smaller than the 4.91 million sales we thought occurred.

The National Association of Realtors, which for decades has published statistics on sales of existing homes, says that its data were wrong and that fewer homes were sold from 2007 to 2010 than it had reported.

New numbers will be issued Dec. 21, The Associated Press reported.

Questions about the numbers were first raised earlier this year by CoreLogic, a real-estate analysis firm, which said the NAR's home-sales numbers could be as much as 20% too high.

While the NAR said 4.91 million existing homes were sold in 2010, CoreLogic said its analysis showed that only 3.3 million homes were sold.

The NAR responded by saying it would take another look at the data. In recent months, the group consulted with CoreLogic, as well as the Federal Reserve, the Department of Housing and Urban Development, the Mortgage Bankers Association, the National Association of Home Builders, Fannie Mae and Freddie Mac, The AP reported.

The NAR concluded that its numbers were too high and that some sales had been counted twice.

OOPS! Reported home sales 20% too high? …Just a mistake, no nefarious action there, no. No self-interest driven deception foisted upon the masses that a commoner might commonly refer to as FRAUD?

“No,” says President Obama, “technically” they can’t be prosecuted because they didn’t break the law. Really? Guess he’s never heard that fraud is completely illegal.

In case you didn't see it yesterday in the comments, here is someone who is running for President who promises to actually do something about the fraud:

Monday, December 12, 2011

Equity futures are tumbling this morning with the dollar strengthening, Euro falling, bonds rising, WTIC oil falling back below the $100 mark, gold & silver are down sharply, and food commodities are lower, once again resting on the neckline support of a very large H&S top formation.

Below is a chart of gold, you can see that it has fallen to initial up sloping support:

Should that support fail, the next support will be found in the $1,540ish range where the longer term up sloping trend line is currently co-located with prior volumetric support. Of course it could turn around from the current support level, we’ll have to watch it and see.

Below is the H&S pattern in wheat with the current price sitting on the neckline:

The central EuroCriminal latest meeting and meeting and meeting went so fantastically well that the media had a frenzy and stocks flew higher for, oh, about four hours as the half-life of their stupid pronouncements, rumors, and emergency meetings continues to shorten to less time than is required to cook a real turkey. Even as the equity market was heading higher, spreads covering the debts were still shooting higher.

The current lack of confidence in the Eurozone probably is creating somewhat of a “flight to safety” play back to the U.S. – hey, all money made of debt is dumb money. And the United States is full of it. In fact the only thing we do better than Europe is to pretend that our math is somehow more workable than theirs… it’s not. Impossible is impossible no matter where in the world you are.

So the turkeys continue to squawk while they attempt to snow the people into believing the same people who created the impossible math can somehow reverse or control their ill-conceived deeds – not going to happen. Yet the complicit mainstream media continues to obey their masters while morons still continue to listen to the manure the crap purveyors spew. Why anyone would invest a nickel in any of these “markets,” much less actually listen to these narcissists is beyond me.

Today our own central criminals meet once again so that they can spew forth at tomorrow’s FOMC announcement – oh boy, can’t wait! Think I’ll hang on their every word and parse the meaning between the lines, then I’ll head to Vegas and put my life’s savings on black. If you want a sure bet, though, bet that they will continue to act in desperation to hold onto their power – that is the only given besides the fact that “other events” are well under way.